世界发展银行-China_rsquo_s-Doing-Business-Success-_-Drivers-of-Reforms-and-Opportunities-for-the-Future_45页_4mb

Summary of China's Doing Business Success: Drivers of Reforms and Opportunities for the Future

Core Content

This working paper by the World Bank analyzes China's progress in business regulatory reforms over the past decade, particularly focusing on the period from 2018 to 2020. It highlights how China has significantly improved its business environment, leading to a substantial rise in its Doing Business ranking from 78th in 2018 to 31st in 2020, and becoming one of the top 10 global reformers for two consecutive years. The paper explores the drivers behind these reforms and provides policy recommendations for future improvements.

Main Points

1. China's Doing Business Performance (2005-2020)

• China has consistently improved its business environment over the past 15 years.
• From 2005 to 2018, the progress was relatively slow.
• In 2018-2020, China accelerated its reforms, leading to a 47-place jump in the Doing Business ranking.
• China improved across almost all Doing Business indicators, with the exception of "Getting Credit" and "Registering Property".
• China has become a global leader in several areas, including "Getting Electricity" (ranked 12th) and "Contract Enforcement" (ranked 5th).

2. Key Business Regulatory Reforms (2018-2020)

• National Reforms:

  • The Supreme Court issued judicial interpretations of the 2006 Enterprise Bankruptcy Act, enhancing the insolvency framework.
  • The business tax was replaced by value-added tax (VAT), reducing the tax burden on firms.
  • The "single-window" system for trade was established, integrating data from 25 agencies and streamlining procedures.
  • The State Council issued the "Decree on Optimizing the Business Environment" in 2020, setting principles for reducing red tape, improving transparency, and promoting equal treatment of all market entities.

• Reforms in Beijing and Shanghai:

  • Beijing implemented a Three-Year Action Plan (2018-2020) with 298 reform tasks, emphasizing streamlining administrative procedures, reducing transaction costs and time, and enhancing digital services.
  • In 2019, Beijing expanded its reform agenda to include areas like intellectual property rights, market supervision, and access to finance for SMEs.
  • Beijing established a Municipal-level E-government Service Platform, leveraging cloud technologies to improve data sharing and online services.
  • The city also launched the first SME Credit Renewal Center, providing standardized and transparent credit services.

3. Drivers of Reform

• High-level Leadership: The Chinese government, particularly Premier Li Keqiang, has emphasized the importance of a better business environment as a key driver of economic competitiveness and productivity.
• Local Policy Experimentation: Cities like Beijing and Shanghai have tested and implemented reforms that serve as models for the national level.
• Strong Enforcement and Accountability: The reforms have been supported by strict implementation and monitoring mechanisms.
• Private Sector Participation and Communication: The government has engaged with the private sector to ensure reforms align with their needs and expectations.
• Digital Technologies and E-Government: China has heavily invested in digital infrastructure, making services more efficient and transparent.
• International Knowledge Sharing: China has drawn on global best practices and used the Doing Business rankings as a benchmark and motivator for reform.

Key Information

• The Doing Business project evaluates the ease of doing business for SMEs using 10 indicators, including starting a business, getting electricity, and resolving insolvency.
• The "Fang Guan Fu" reforms (2015) aimed to delegate power, streamline administration, and optimize government services, laying the groundwork for subsequent reforms.
• The State Council's "Decree on Optimizing the Business Environment" (2020) outlines principles for fostering a stable, fair, and transparent business environment, including reducing red tape and improving legal protections.
• Beijing's reforms included setting up a centralized government service center, streamlining procedures, and expanding the scope of reforms to include SME access to finance and intellectual property protection.
• The economic impact of reforms has been significant, with studies showing that business regulatory reforms can increase GDP growth and attract foreign investment.

Opportunities for Future Reforms

• There is still room for improvement in areas such as "Getting Credit" and "Registering Property".
• Enhancing the business environment for large companies and foreign direct investment (FDI) could further boost economic performance.
• Strengthening the legal framework for insolvency and ensuring more transparency in tax procedures and tariff structures remain key priorities.

Policy Recommendations

• Continue to streamline administrative procedures and reduce red tape.
• Enhance digital infrastructure and e-government services to improve efficiency and transparency.
• Strengthen legal protections for minority investors and ensure a level playing field for all market entities.
• Encourage private sector participation in the reform process to ensure alignment with business needs.
• Leverage international best practices and maintain the momentum of reform to sustain economic growth and competitiveness.

Conclusion

China's business regulatory reforms over the past decade have been a major factor in its improved Doing Business ranking. These reforms, driven by high-level leadership, digital transformation, and strong institutional support, have enhanced the efficiency and transparency of the business environment. However, continued efforts are needed to address remaining challenges and further improve the investment climate for all types of businesses, including large firms and foreign investors.